“The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise.” So said Socrates sometime during the fourth century BC.
We’ve used “millennial” as a synonym for “young person” for so long that it’s easy to forget that every generation graduates, gets jobs, and grows up like those before them. So over the last month, I’ve spent some time getting to know the new “young person”—Gen Z—and I think they are going to change capitalism as we know it.
Gen Z refers to those born between 1997 and 2010. They are the most diverse generation to date. The vast majority support same-sex marriage, transgender rights, and gender equality. They are more educated than previous generations, but also more susceptible to stress and depression. And why shouldn’t they be? They are worried about mass shootings on campus, calcification of the oceans, rising college tuition, and housing costs, and a future where robots will likely be smarter and faster than humans.
Perhaps that’s why Gen Z largely rejects the assumptions that my Gen X peers learned in business school during the last century. We were taught that Milton Friedman’s 1962 book Capitalism and Freedom was a Bible for corporate responsibility. Businesses were created to deliver shareholder value. We learned that when shareholders win, everyone else will do just fine (probably).
A lot of bad behavior—from unethical business practices to sexual harassment to outright racism—was permitted if the behavior was committed by executives who drove up stock prices. A CEO who was offensive, arrogant, and reckless was seen as bold, confident, and unafraid to take risks. We lionized men—and they were almost all men—who were willing to pursue profit at any cost.
Belittling the next generation is an ancient meme. Imagine what Socrates would say about high schoolers addicted to iPhones, vaping in class, and abandoning rented scooters. Yet Gen Z is entering our workforce, and they are poised to be the largest consumer market segment for decades to come. If your business is going to thrive, you will have to figure out how to inspire them, employ them, and sell to them. Start by listening to what they care about.
The world has changed, and the CEO who only cares about the stock price is so “two thousand and late” (hat tip to Fergie, fellow Gen-Xer). Gen Z simply won’t overlook the cost of bad CEO behavior—something they make clear in both their protests and their preferences every day. The rest of us are getting a little smarter too. It only took some mega-cap bankruptcies, financial crises, and government bailouts for investors to take a more holistic view toward value creation. Your ticker symbol says a lot about the value of your company, but other voices expand your field of vision.
SurveyMonkey recently conducted a five-country survey on what people expect of business leaders. Half of consumers say they’ve bought from or boycotted a company because of the social or political views of the company, or the way it does business or treats its employees. And in every country we surveyed, the majority of consumers want business leaders to stand up for social or political issues they believe in. Within the U.S., 57% of participants agreed. In Germany, that number soared to 80%.
As Marc Pritchard, chief brand officer at P&G, is fond of saying, doing good is good for growth. Legendary business leaders who know this have invested in building company cultures that create as much value for employees as they do for shareholders.
When SurveyMonkey board member Brad Smith was CEO of Intuit, he aligned the whole company around shared values of integrity, passion, and respect. He also increased Intuit’s market cap from $10 billion to $60 billion. Leaders such as fellow SurveyMonkey board member and Facebook COO Sheryl Sandberg have also changed the paradigm, encouraging us all to bring our whole selves to work—emotion and empathy included. Sheryl didn’t have to speak up about the experiences of women in our workplaces, but she did so because she had a hunch that more opportunities for women would yield stronger companies for all of us—and she was right.
These lessons have never been more important for company leaders who want to be an employer of choice for Gen Z. New grads want to dedicate their time and talents to purpose-driven companies. In the most competitive labor market in the history of human capital, you can’t compete without an employee-focused culture and an authentic mission for why your company exists.
Lever CEO Sarah Nahm lives and breathes this mantra every day. Lever produces recruiting software designed to help companies be smarter about the way they source, nurture, interview, and hire top talent. What’s really helpful when you’re trying to help other companies build world-class teams is having one yourself. Nahm was the only woman on Lever’s team for two years when the startup was getting off the ground. Then she got real about what she needed to do to implement the best-in-class, inclusive recruiting practices she preached to customers.
Today, she has a 95% CEO rating on Glassdoor and a team that’s setting new standards for representation in tech. Fifty-one percent of her workforce is female, along with 40% of the board. Forty-one percent of engineers identify as women too, and the company consistently lands on lists of the best places for women to work.
The major crises of our time—climate change, #MeToo, and addressing social inequality—have made it clearer than ever that businesses have more stakeholders to serve than their shareholders. The trillion-dollar question for capitalists is: What role should corporations play in shaping our society today?
The answer to that question will define what it means to be a good CEO in 2020 and beyond.
Take the co-CEOs of Allbirds, Tim Brown and Joey Zwillinger, as a case study. Allbirds is a SurveyMonkey customer, and their shoes are such a staple of our workforce’s attire that it’s basically part of the uniform. When they launched in 2015, they took on a big, old industry (footwear) with big, beloved brands (Nike) and a firmly established way of doing business (wholesale). Instead of building on a proven model for driving shareholder value, they blew the whole thing up.
Zwillinger and Brown built Allbirds from scratch for the 21st century, complete with sustainable materials, a simplified aesthetic, and a direct-to-consumer online business model. Everything that goes into a pair of Allbirds—from superfine merino wool to laces made from recycled plastic bottles to its SweetFoam™ sugarcane-based sole—is sourced and manufactured in a way that protects people and the environment.
If environmentalists and capitalists can agree on one thing, it is that Allbirds is killing it. Everyone from Gwyneth Paltrow to President Obama have been known to rock Allbirds, and Axios reported that the company has been profitable since 2016, thanks in part to how its streamlined designs also streamlined costs.
Societal good has been a cornerstone of their corporate strategy from day one, and that enables them to think differently about the role of a shoe company. They developed SweetFoam because they were dissatisfied with the lack of eco-friendly options for shoe soles. A CEO of the past might have hoarded this innovation as top-secret intellectual property—but Brown and Zwillinger are now distributing it to help other shoe companies get a little greener too. This move is uncovering a new channel for driving impact and profit at the same time.
As Brown says, “The Allbirds brand wasn’t built to be just about shoes. It’s about finding better ways to make stuff.”
We just celebrated the 20th anniversary of when surveymonkey.com was registered as a domain name. We’ve seen plenty of companies come and go, and one thing I know with conviction: Bet on the good listener with resources and the authority to get stuff done.
In an era where our government is paralyzed to act, we need corporate leaders who can step up and commit to all stakeholders (including shareholders). The new model of rock-star CEO can do both.
Our society is facing unprecedented challenges and a pace of change that’s never been seen before (a line that has been uttered by every generation since Socrates). As Gen Z starts to fill the ranks of our employees, customers, and future shareholders, it’s clearer than ever that we need a new generation of rock-star CEOs to lead the way who are as relentless in the pursuit of progress as they are in the pursuit of profits.
Zander Lurie is CEO of SurveyMonkey and serves on its board of directors, which he has been a part of since 2009. He cofounded the California-based nonprofit organization CoachArt, which serves chronically ill children and their siblings.